Owens Corning
For the period ended Mar 31, 2024. Filed Apr 24, 2024.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Mar 31, 2024 · Filed Apr 24, 2024
Extracted filing text, with the paragraph anchors used by the comparison.
See the whole filing, with its images and exhibitsContents
5. Goodwill and Other Intangible Assets
- GOODWILL AND OTHER INTANGIBLE ASSETS
Goodwill
The Company tests goodwill and indefinite-lived intangible assets for impairment during the fourth quarter of each year, or more frequently should circumstances change or events occur that would more likely than not reduce the fair value of a reporting unit below its carrying value.
No testing was deemed necessary in the first three months of 2024. The changes in the net carrying value of goodwill by segment are as follows (in millions):
| Roofing | Insulation | Composites | Total | |
|---|---|---|---|---|
| Gross carrying amount at December 31, 2023 | $395 | $1,520 | $425 | $2,340 |
| Foreign currency translation | (1) | (13) | (1) | (15) |
| Gross carrying amount at March 31, 2024 | 394 | 1,507 | 424 | 2,325 |
| Accumulated impairment losses at December 31, 2023 | — | (948) | — | (948) |
| Foreign currency translation | — | 8 | — | 8 |
| Accumulated impairment losses at March 31, 2024 | — | (940) | — | (940) |
| Balance, net of impairment, at March 31, 2024 | $394 | $567 | $424 | $1,385 |
The annual impairment tests performed in the fourth quarter of 2023 indicated that the business enterprise value of the Composites reporting unit exceeded its carrying value by approximately 5%. There is uncertainty surrounding the macroeconomic factors that impact this reporting unit and a sustained downturn in these factors or a change in the long-term revenue growth or profitability for this reporting unit could increase the likelihood of a future impairment.
- 16 -
- GOODWILL AND OTHER INTANGIBLE ASSETS (continued)
Other Intangible Assets
The Company amortizes the cost of other intangible assets over their estimated useful lives which, individually, range up to 25 years. The Company’s future cash flows are not materially impacted by its ability to extend or renew agreements related to its amortizable intangible assets.
Other intangible assets consist of the following (in millions):
| March 31, 2024 | December 31, 2023 | |||||
|---|---|---|---|---|---|---|
| GrossCarryingAmount | AccumulatedAmortization | NetCarryingAmount | GrossCarryingAmount | AccumulatedAmortization | NetCarryingAmount | |
| Indefinite-lived trademarks and trade names | $990 | $— | $990 | $992 | $— | $992 |
| Amortizable intangible assets | ||||||
| Customer relationships | 608 | (293) | 315 | 614 | (283) | 331 |
| Technology | 324 | (206) | 118 | 326 | (203) | 123 |
| Trademarks | 12 | (2) | 10 | 12 | (2) | 10 |
| Other (a) | 79 | (2) | 77 | 74 | (2) | 72 |
| Total other intangible assets | $2,013 | $(503) | $1,510 | $2,018 | $(490) | $1,528 |
(a)Other primarily includes emissions.
There aretwo indefinite-lived intangible assets that are at an increased risk of impairment, both of which are used by our Insulation segment and were partially impaired in the fourth quarter of 2022. A change in the estimated long-term revenue growth rate or discount rate for the segment could increase the likelihood of a future impairment.
The following table presents the carrying values of these assets as of March 31, 2024:
| Trade names and trademarks | March 31, 2024 |
|---|---|
| European building and technical insulation trade name | $88 |
| Global cellular glass insulation trademark | $80 |
Amortization expense for intangible assets for the three months ended March 31, 2024 and March 31, 2023 was $16 million and $18 million, respectively. Amortization expense for intangible assets is estimated to be $48 million for the remainder of 2024.
The estimated amortization expense for intangible assets for the next five fiscal years ended December 31 is as follows (in millions):
| Period | Amortization |
|---|---|
| 2025 | $58 |
| 2026 | $44 |
| 2027 | $35 |
| 2028 | $34 |
| 2029 | $33 |
The text of this filing, as the company filed it with the SEC, without its images or exhibits. This is not investment advice.